PUK is seeking £23m from up to 23 investors, including contractors; the Treasury will retain a 49% share and contribute £22m. It intends to use the money to contribute to procurement funds, and may take equity stakes in projects.
PUK chief executive James Stewart said considerable interest had been shown since the offer was launched. He said: "Contractors are by no means ruled out, and there's certainly interest from contractors and operators. We want a good mix of investors." The list of investors will be announced next month.
The move to sell shares in PUK has raised concerns over possible conflicts of interest, as contractors could become part owners of the body advising the clients that they are employed by.
A Treasury spokesperson said that this was not a concern for it, because investors would have no say over which contracts PUK got involved in. He said: "That'll be up to the advisory council. This is the very reason why the advisory council was set up." However, one senior City banker disagreed: "There would be a tremendous conflict of interest if contractors and PFI banks did invest," he said. He added that there was no financial reason to invest in PUK because the prospectus said a dividend was not expected.
"The whole thing is just totally off the wall. The only reason to invest in this is if you think by doing so it will get you brownie points from the government." The Treasury spokesperson said that although returns would not be as high as in other investments, PUK hoped to grow capital and return dividends in the longer run.
He said: "Do they want to be at the beginning of a new private company that is going to spearhead the development of PPPs?" PUK's Stewart said that companies would be limited to a £5m stake to avoid the perception that one shareholder was predominant.
Stewart said that PUK would also borrow up to £50m, giving it £95m in total capital. He said: "If the project doesn't happen, or if it's delayed, we also suffer."